Believe it or not, we’re not having too much trouble finding solid opportunities out there when we run our weekly screens. I’m mostly focused on recent earnings winners, with my top pick being Crocs Inc. (CROX), observes Mike Cintolo, editor of Cabot Momentum Trader.
CROX has re-established its uptrend after a very nice earnings reaction. Its iconic, flagship clogs continue to sell well. But its growth story is becoming more diversified, with sandals becoming a bigger sales driver while lifestyle footwear and the HeyDude casual footwear brand are both expanding.
Third-quarter earnings crushed estimates, with revenue of just over $1 billion increasing 5% year-on-year and earnings per share of $3.69 beating estimates by 38 cents. The Crocs brand delivered a third-quarter record, with international revenue growing by double digits. Sandals were also a standout in the quarter.
We previously exited CROX at essentially break-even in August ahead of the late-summer correction. But we’re willing to give it another go after what looks like a perception-changing quarterly report. The stock continues to benefit from the multi-month bottoming effort that finished this spring – and paved the way for the stock’s strength from April through July.
The pullback after that found support above the 40-week line. While the initial bounce wasn’t great, the recent earnings gap looks powerful. We’re okay taking a small position here or (preferably) on dips of a few points.
